In Brief
Kalamani Tex and its managing partner were convicted under Section 138 of the Negotiable Instruments Act for issuing a dishonoured cheque of Rs. 11.20 lakhs to a business associate. The trial court had acquitted them, finding no legally enforceable debt. The High Court reversed this, relying on the admitted signatures on the cheque and deed of undertaking. The Supreme Court upheld the conviction, holding that once signatures are established, statutory presumptions under Sections 118 and 139 NIA shift the burden to the accused to prove non-existence of debt by a preponderance of probability. The appellants' bare denial failed to meet this standard. The conviction was upheld but imprisonment was remitted given the voluntary deposit of the cheque amount.
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